Best Nonprofit & Charitable Organizations Lawyers in Colorado

About Nonprofit & Charitable Organizations Law in Colorado, United States

Nonprofit and charitable organizations play a key role in Colorado by serving communities, providing public benefits, and promoting social, educational, religious, and other charitable purposes. Nonprofit law in Colorado governs the creation, operation, regulation, and dissolution of organizations that are formed for nonprofit purposes. These organizations operate without distributing profits to members or directors; instead, all funds are dedicated to supporting their mission. Colorado's legal landscape ensures that nonprofits comply with both state and federal regulations, including the Colorado Revised Nonprofit Corporation Act and the rules set by the Internal Revenue Service (IRS) for tax-exempt status.

Why You May Need a Lawyer

Operating or starting a nonprofit in Colorado can involve complicated legal requirements and compliance obligations. Engaging a lawyer can help in a variety of situations, such as:

• Forming a Nonprofit: Guidance on choosing the appropriate nonprofit entity, preparing articles of incorporation, and drafting bylaws.
• Applying for Tax-Exempt Status: Navigating the IRS application process for 501(c)(3) or other designations and ensuring compliance with both federal and state law.
• Governance and Compliance: Advice on board governance, conflicts of interest, and policy development to meet state and federal standards.
• State Registration: Assistance with required registrations with the Colorado Secretary of State for charities and charitable fundraising.
• Employment Law: Understanding obligations to employees, volunteers, and contractors under state and federal law.
• Contracts and Agreements: Drafting and reviewing agreements with donors, grantmakers, vendors, and other entities.
• Tax Matters: Addressing issues related to sales tax, property tax exemption, IRS filings, and compliance audits.
• Intellectual Property: Protecting the organization’s name, logos, and other intellectual property.
• Dissolution: Ensuring proper procedures for closing a nonprofit or merging with another organization, including distribution of remaining assets.

Local Laws Overview

Colorado nonprofits are primarily regulated under the Colorado Revised Nonprofit Corporation Act. Key laws and requirements include:

• Incorporation: Nonprofits must file Articles of Incorporation with the Colorado Secretary of State and pay a filing fee.
• State Tax Exemption: After incorporation, organizations may apply for a state tax exemption with the Colorado Department of Revenue.
• Charitable Solicitation Registration: Organizations that solicit funds must register annually with the Colorado Secretary of State and file annual renewals and financial disclosures.
• Governance: Nonprofits are required to have a board of directors, annual meetings, and keep accurate records of meetings and finances.
• Reporting: Most tax-exempt organizations must file annual reports with the IRS (usually Form 990 series) and periodic charitable solicitation renewals with the state.
• Public Disclosure: Certain records, including tax exemption applications and annual tax returns, must be made available to the public upon request.
• Employment Laws: Nonprofits must comply with all applicable labor laws, including wage and hour, workers compensation, and anti-discrimination statutes.

Frequently Asked Questions

What is the difference between a nonprofit and a charity in Colorado?

A nonprofit is any organization that operates for purposes other than generating profit for owners or shareholders. A charity is a specific type of nonprofit that exists to serve a public or charitable purpose, such as relief of poverty, education, or religion.

How do I start a nonprofit in Colorado?

To start a nonprofit, you must choose a name, file Articles of Incorporation with the Secretary of State, develop bylaws, appoint a board of directors, hold an organizational meeting, and apply for federal and state tax-exempt status.

Do I need to register my charity in Colorado to fundraise?

Yes, most charities that solicit donations in Colorado must register with the Secretary of State before fundraising and renew their registration annually.

Can nonprofits pay their staff in Colorado?

Yes, nonprofits can compensate employees and contractors, but all earnings must be used to support the organization’s mission and must comply with federal and state wage laws.

How does my Colorado nonprofit get tax-exempt status?

You must file for 501(c)(3) or another tax-exempt status with the IRS and separately apply for state tax exemption through the Colorado Department of Revenue.

What annual filings are required for Colorado nonprofits?

Most nonprofits must file an annual report with the Colorado Secretary of State, renew their charitable registration, and file a federal tax return with the IRS.

What records are Colorado nonprofits required to keep?

Nonprofits must maintain accurate financial records, meeting minutes, a list of board members, and copies of important documents such as articles, bylaws, and IRS determinations.

Are board members personally liable for nonprofit debts?

Generally, board members are not personally liable as long as they act in good faith and in accordance with the law, but there are exceptions for misconduct or violation of fiduciary duties.

How can a nonprofit lose its tax-exempt status in Colorado?

Nonprofits can lose tax-exempt status for failing to file required forms, engaging in prohibited activities, or not operating in furtherance of their stated mission.

Can a nonprofit convert to a for-profit in Colorado?

Converting from nonprofit to for-profit is rare and legally complex. Assets are generally required to be transferred to another nonprofit upon dissolution rather than benefiting private individuals.

Additional Resources

If you need further information or assistance, these resources can be valuable:

• Colorado Secretary of State - Business and Licensing Division: Information on nonprofit formation and charitable solicitation.
• Colorado Department of Revenue - Tax Information for Nonprofits.
• Internal Revenue Service - Exempt Organizations Division.
• Colorado Nonprofit Association - Offers educational resources and advocacy for Colorado nonprofits.
• Community Resource Center in Colorado - Provides capacity building and technical assistance to nonprofits.
• Legal aid clinics and law school pro bono programs.

Next Steps

If you are considering forming a nonprofit, need help maintaining compliance, or have a legal question about your existing organization, the following steps can help:

• Gather all relevant information about your organization, including governing documents and prior filings.
• Identify and write down your specific legal questions or concerns.
• Contact a Colorado attorney experienced in nonprofit or tax-exempt law. Many attorneys offer initial consultations at low or no cost.
• Reach out to the Colorado Secretary of State and the Colorado Nonprofit Association for guidance and referrals.
• Attend local nonprofit workshops or legal clinics for additional education and support.

Legal requirements for nonprofits in Colorado are complex but manageable with the proper information and support. Consulting with a qualified lawyer ensures your organization remains compliant, effective, and focused on achieving its mission.